Why do Cex.io ghash prices vary so much?

[nrd525]

I'm looking at the bitcoin wisdom graph of GHS and am very puzzled. Why does the price go up and down so much?

https://bitcoinwisdom.com/markets/cexio/ghsbtc

Do they allow leveraged trading?

It is also puzzling that the GHS price was stable for mid-August to mid-September.

[1714878800]

1714878800

[1714878800]

1714878800

[Puppet]

Its easy to see why it goes down; someone did the math.
What I dont understand is why it sometimes goes up.

[OgNasty]

Back that chart out a bit.  It's pretty clear that fixed GH/s investments only go one way, down.  This has been true for several years now.  How ghash.io got so many people to buy a fixed GH/s investment with a rising cost model is absolutely mind blowing and says a lot for the skills of their interface developers.  Back in the GLBSE days, fixed GH/s investments with NO COST were considered scams and horrible investments.  I guess ghash.io is great at two things, making a slick interface, & advertising to noobs.

[nrd525]

I'm interested in short-term movements. For instance, it crashed from 0.0034 to 0.0009 on Sept 12.

[OgNasty]

I'm interested in short-term movements. For instance, it crashed from 0.0034 to 0.0009 on Sept 12.

Like I said, it only moves in one direction, down.  If you think it is or ever has gone up, you need to back the chart out.  Chasing dead cat bounces is not the way to make money investing, although inexperienced traders usually get caught holding a few bags before they figure that out.

[nrd525]

This thread isn't about the long-term trend - it is about short and medium term inconsistencies that occur during the long term trend.

I'm a total bear on mining contracts and am shorting TH1 on Bitfinex.  However I'm trying to understand the mining contract market so that I avoid things like a short-term price spike that could liquidate my position.

I could understand if mining difficulty were to fall 30% that it could increase the value of GHS, but mining difficulty hasn't fallen since 2011.  I could see the GHS price increasing if there was a decline in the rate at which mining difficulty was increasing - but that isn't the type of judgment that you can make in a day. It takes 30 days or more to determine a reversal in the trend and you only know for certain after the fact.

So I'm guessing that it is irrational actors who either drive up the price or drive it down, by buying or selling at irrational values.  While this strategy could work in alt-coins (or even Bitcoin) where the underlying value is hard to determine (and where pumping a coin can actually increase its value by attracting new people) - it makes far less sense when the expected value of the mining contract is much easier to calculate.

[philipma1957]

This thread isn't about the long-term trend - it is about short and medium term inconsistencies that occur during the long term trend.

I'm a total bear on mining contracts and am shorting TH1 on Bitfinex.  However I'm trying to understand the mining contract market so that I avoid things like a short-term price spike that could liquidate my position.

I could understand if mining difficulty were to fall 30% that it could increase the value of GHS, but mining difficulty hasn't fallen since 2011.  I could see the GHS price increasing if there was a decline in the rate at which mining difficulty was increasing - but that isn't the type of judgment that you can make in a day. It takes 30 days or more to determine a reversal in the trend and you only know for certain after the fact.

So I'm guessing that it is irrational actors who either drive up the price or drive it down, by buying or selling at irrational values.  While this strategy could work in alt-coins (or even Bitcoin) where the underlying value is hard to determine (and where pumping a coin can actually increase its value by attracting new people) - it makes far less sense when the expected value of the mining contract is much easier to calculate.

whales do big selloffs.  the ghs can drop from 30 to 18   due to big sell off.   

Next  you get bounce  and that 18 jumps back up to 22 or 25 then flattens.   this pattern  is common.

over and over again.

[nrd525]

That doesn't make sense.  You don't become a whale by doing stupid trades.

[OgNasty]

That doesn't make sense.  You don't become a whale by doing stupid trades.

You don't have time to slowly leak $1 shares to the market if you're a whale either.

[philipma1957]

That doesn't make sense.  You don't become a whale by doing stupid trades.

but you can act like a whale with OPM >  
   If I was to remind you that one of cex.io executives was arrested last year when silk road bust happened you may think that some selloffs are about shifting funds not making winning trades.

I think the executive was later released.   Not sure if any of this means much. But there is a lot of money on the cex.io trading floor.

[testerman]

That doesn't make sense.  You don't become a whale by doing stupid trades.

but you can act like a whale with OPM >  
   If I was to remind you that one of cex.io executives was arrested last year when silk road bust happened you may think that some selloffs are about shifting funds not making winning trades.

I think the executive was later released.   Not sure if any of this means much. But there is a lot of money on the cex.io trading floor.

i didnot know that one of the cex.io executives was arrested last year, where can i find the news in the internet?

[philipma1957]

That doesn't make sense.  You don't become a whale by doing stupid trades.

but you can act like a whale with OPM >  
   If I was to remind you that one of cex.io executives was arrested last year when silk road bust happened you may think that some selloffs are about shifting funds not making winning trades.

I think the executive was later released.   Not sure if any of this means much. But there is a lot of money on the cex.io trading floor.

i didnot know that one of the cex.io executives was arrested last year, where can i find the news in the internet?

google  sept maybe oct 2013.   I do believe charges were dropped